Indicators of beef's economy recorded continued improvements as key cattle prices improved, spurred by smaller production and positive demand. Five of the eight economic indicators tracked by Drovers' pointed up. Higher production costs and lower performance resulted in two of the down arrows. Feedyard margins were still negative in December, but moving closer to breakeven. Pork and poultry cost less in the meat case, earning the third down arrow. Smaller feedlot placements and lighter calves point to continued tightening of beef supplies, so expect box beef and retail beef prices to increase. That's good for prices, perhaps providing the first real test for increased consumer demand. For now demand is solid, as indicated by improved packer margins with higher prices for fed cattle.